An unlicensed individual, for compensation, presents coverage options to consumers and negotiates the terms of life insurance applications with an insurer on their behalf. Under Pennsylvania law, which conclusion is correct?

Why B is correct

Negotiating insurance is one of the core acts constituting the business of insurance in Pennsylvania (40 P.S. §§ 310.1, 310.3), and doing it for compensation is precisely the conduct the producer licensing requirement exists to police (40 P.S. § 310.8). The unlicensed negotiator performs a regulated transaction on the insurer's behalf and needs a license before the work begins — delivery of a policy later has nothing to do with it. Both the negotiator and the carrier face exposure under 40 P.S. § 310.11 for permitting unlicensed transactions.

Why the other options are wrong

• A) The licensing trigger is the negotiating and soliciting conduct itself, not the later physical delivery of a policy.
• C) The unlicensed person who performs the regulated acts is directly exposed under 40 P.S. § 310.11, not just the insurer.
• D) Compensation signals the activity is a business and strengthens, not weakens, the licensing requirement.

Memory hook

If you negotiate for pay, you need the license before the handshake.